The jaw-dropping success of movies such as KGF Chapter 2 and RRR had lifted spirits of multiplex owners, who were looking to shake off the pandemic blues after two long years.
However, latest regional movies including Liger have failed to cheer the Box Office. Besides, Bollywood movies such as Laal Singh Chaddha, Shamshera and Dobaaraa, too, have faced public backlash.
All of this, analysts say, will lead to a bumpy road for listed players like PVR and Inox Leisure.
Deepak Jasani, Head of Retail Research, HDFC Securities says only handful of regional movies do well nationwide. Revenue from South Indian movies unlikely to fill the gap. Multiplexes need good show from Bollywood movies. Pinning hopes on regional movies is too optimistic.
Shares of PVR and Inox Leisure have slumped around 14% each over the past one month as revenue from Bollywood movies account for 40-45% each for both these players. In comparison, the BSE Sensex was unchanged during the period.
Financially…
…PVR reported highest-ever revenue and net profit of Rs 1,000.4 crore, and Rs 68.3 crore, respectively, in the June quarter of FY23.Inox, meanwhile, reported record revenue of Rs 589 crore, and profit of Rs 74 crore.
However, this was largely driven by higher food and beverages revenue, lower employee costs and higher other income.
Further, Net Box Office Collection, as a percentage of revenue, improved only 2 percentage points for both, PVR and Inox Leisure.
Moreover, Inox Leisure clocked a mere 6% increase in footfalls above the pre-pandemic levels, while PVR is yet to recover the lost ground.
G CHOKKALINGAM, FOUNDER AND CHIEF INVESTMENT OFFICER, EQUINOMICS RESEARCH says, movie goers are switching to OTT. Low budget movies are being released directly on OTT platforms. Big ticket movies make their way to streaming apps after two-three weeks of Box Office run. OTT will eat into multiplexes’ revenues in the long-run.
Against this backdrop, analysts see another 10-15% correction in stock prices. They also expect weak earnings to put pressure on price-to-earnings valuation multiples.
On Friday, stock-specific action and auto sales data will guide investors. Globally, market participants will await the US jobs data.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor